Institutional theory : a study based on the regionalisation of food manufacturing and related industries.

Abstract

Organisations interact continuously with their environment and eventually

become isomorphic with them. This phenomenon has been studied by sociologists

and has led to the emergence of the institutional theory. This theory proposes that

organisations need to abide by institutional rules set by powerful organisations in

order to be given legitimacy. The purpose of this research is to ascertain if

institutional theory is valid when applied against the behaviour of companies in

the food manufacturing and related sectors.

Since 1991, the Singapore government has been steadily encouraging local

companies to sprout a second wing abroad, especially in the Asia-Pacific region.

One noticeable channel through which many companies indicate their responses is

their description of foreign activities in their annual reports.

I Content Analysis' is chosen to analyse the annual reports of these companies

because of its virtues over other research methods. Hypothesis testing is then

carried out to determine whether the institutional theory is applicable to our local

context and the extent of its application.

Our key finding is that the behaviour of the food manufacturing and other related

companies is a reflection of the institutional theory.